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Twitter user growth stalls as revenue fell 5% in Q2; investors hammer stock

Twitter reported that it failed to increase the number of users during the second the quarter and that revenue slid as the company’s attempt to reboot seemed to hit a wall.

In its latest earnings release, the company said that “monthly average usage” was 328 million for the second quarter. While that was up five percent from the same quarter one year ago, it was the same number it reported for the first quarter. That number matched analysts’ projections which were betting on no user growth for Twitter.

Just as troubling, the company reported $ 574 million of revenue, a drop of 5 percent compared to the same period one year ago. The drop was not as steep as the $ 537.5 million revenue that analysts had been projecting.

The result was a loss of $ 116 million for the quarter, up from $ 107 million for the same quarter one year ago.

The revenue slump follows an 8 percent drop in the first quarter, which was Twitter’s first ever year-over-year revenue decline.

The company again tried to highlight that it was increasing its “daily average usage,” which it said increased 12 percent compared to the same period a year ago. That was the third straight quarter of double-digit “daily average usage” growth, though the company does not provide the underlying numbers so it’s impossible to know if that number increased from the first quarter.

Still, that is a slight dip from the the 14 percent DAU it reported in Q1.

The company has started using the term “monthly average usage” and “daily average usage” rather than the traditional “user” over the past year for reasons that are not entirely clear. A spokesperson said the company considers “usage” and “user” to mean the same thing.

“We’re proud that the product improvements we’re making continue to increase their overall contribution to Twitter’s growth,” said Jack Dorsey, Twitter’s CEO, in a statement. “We’re strengthening our execution, which gives us confidence that our product improvements will continue to contribute to meaningful increases in daily active usage. We’re also encouraged by the progress we’re making executing against our top revenue generating priorities as we focus on making Twitter the best place to see and share what’s happening, where you can see every side and perspective.”

Twitter’s stock had been on a rebound in recent months. However, after the earnings report was released this morning, investors slammed Twitter’s stock in pre-market trading, causing it to fall 8.55 percent.

More to come.



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